Property Market 2020

hometruths

Ronaldinho wrote: »

I can see the State stepping in at some point to scoop up new builds at 20% discount to use for social housing.

Exactly what they should do. Their current HAP budget would be much better allocated to purchasing rather than renting.

cnocbui

Ronaldinho wrote: »

I can see the State stepping in at some point to scoop up new builds at 20% discount to use for social housing.

If the government were prudent, they wouldn't be providing 'social' housing, period.

Pivot Eoin

Have a read of this: https://www.boards.ie/vbulletin/showthread.php?p=57938416

It's a discussion From Boards in late 2008 about House Prices, initially sparked by someone who said their friends working in Property and Banking said to them that now (November 2008) was going to be the low point of the Housing Prices... How wrong they were!

But it's interesting to look at the conversations, and how similar they are, with similar fluff coming from the EA industry that has been in here the last few days.

Obviously 2008 was different circumstances, and they're not directly comparable, but it's still food for thought!

Bigmac1euro

Knex. wrote: »

DNG are a tedious crowd to deal with, in my experience. Proper shady, even when compared to other EAs.

There's one EA in general around the D7/D15 area that would make me rule out viewing a house just by seeing his name alone.

Does his name begin with a J ?
I think I know who you’re talking about.
Any house listed by DNG I’m ruling out.

We viewed a property up for 280 which DNG had listed.
The EA viewing the house told us we’re looking at 305 easily lots of bids coming in.


Fast forward a few weeks and the same house is listed with a different EA and it’s up for 265.
I’ll generally avoid DNG if possible.

Padre_Pio

JimmyVik wrote: »

The amount of people I told not to buy from 2000 to 2008 is unreal. I genuinely felt sorry for them when they all ignored my "advice" and thought if only they had followed my advice. I realize now that I actually had no clue. I just convinced myself that I knew all about it and could predict it.


These days im jealous of them. Not one of them regret buying. I regret not buying then though. But the upshot is, I dont have a clue and I am only guessing when I make predictions. So its for fun more than anything else.

Have you said this before on the thread?

It's a weird statement to make.
2000-2008 was 12-20 years ago. No one waits that long to buy a house, sure half your mortgage would be paid by now.

Anyone who bought 2000-2004 and 2009-2016 would have missed the peak house prices and capitalised on the downturn. They're not regretting their purchase. A friend bought a house in Dub for €250k in 2012 and it's valued today at €430k.

Others may have pangs of remorse. I work with a guy who bought an apartment in 2008 for €300k with the hopes of flipping it for 330 a few months later. He's just back into positive equity from 2018. Definitely regrets buying.

q85dw7osi4lebg

Ronaldinho wrote: »

I can see the State stepping in at some point to scoop up new builds at 20% discount to use for social housing.

That'll make for interesting times given the margin on most new builds is less than 20%. :rolleyes:

GreeBo

Padre_Pio wrote: »

Others may have pangs of remorse. I work with a guy who bought an apartment in 2008 for €300k with the hopes of flipping it for 330 a few months later. He's just back into positive equity from 2018. Definitely regrets buying.

Why does he regret it?
He is back where he started value wise and has avoided 12 years of renting?

GreeBo

Ronaldinho wrote: »

I can see the State stepping in at some point to scoop up new builds at 20% discount to use for social housing.

would probably have been a lot easier if the state didnt sell social housing at a discount to the occupier...

hometruths

JimmyVik wrote: »

The amount of people I told not to buy from 2000 to 2008 is unreal. I genuinely felt sorry for them when they all ignored my "advice" and thought if only they had followed my advice. I realize now that I actually had no clue. I just convinced myself that I knew all about it and could predict it.


These days im jealous of them. Not one of them regret buying. I regret not buying then though. But the upshot is, I dont have a clue and I am only guessing when I make predictions. So its for fun more than anything else.

Sure, but my post was in response to Hubertj who suggested that people would experience real and painful suffering if house prices drop 50%. If you don't think people will suffer, or that the suffering is worth it, fair enough.

We've touched on this before; I'd prefer to see a functioning property market (like in other countries) where you would have been able to access credit at a lower interest rate post 2008, bought a cheaper house and then you would not have the regrets now.

The reason you were unable to do so is because a lot people who bought overpriced houses pre 08 refused to take responsibility for their poor decisions.

And we are going to repeat it because this time around there are more people like you who think financial prudence has got me nowhere, balls to negative equity, balls to losing my job, balls to global recessions, I don't care, I want a house, rent is dead money, if you can't beat them join them.

And on it goes, but eventually that cycle will break and it will be worse when it does.

PommieBast

Padre_Pio wrote: »

Others may have pangs of remorse. I work with a guy who bought an apartment in 2008 for €300k with the hopes of flipping it for 330 a few months later. He's just back into positive equity from 2018. Definitely regrets buying.

Not surprised be regretted it. Clearly investment rather than for living in.

hometruths

Padre_Pio wrote: »

Others may have pangs of remorse. I work with a guy who bought an apartment in 2008 for €300k with the hopes of flipping it for 330 a few months later. He's just back into positive equity from 2018. Definitely regrets buying.

Was it Dublin? How many bedrooms was the apartment?

combat14

Looks like banks are really starting the squeeze on all forms of lending including mortgages now, while also reducing their house valuations by at least 10%.

Let's hope credit squeeze and reduced valuations don't become a self fulfilling downward property price spiral.


Banks set to squeeze lending to households further

https://m.independent.ie/business/personal-finance/banks-set-to-squeeze-lending-to-households-further-39206326.html

Billythekid19

When do people expect price drops to actually happen? It seems rent prices are only increasing in recent weeks on daft and in general the property prices are remaining static. I reached out to a number of EA's in the last week asking if they were willing to accept under offers for their new build developments and all said prices listed were non - negotiable. I reckon they wont cut their prices (on new builds) until we are officially in a recession.

Gamb!t

Billythekid19 wrote: »

When do people expect price drops to actually happen? It seems rent prices are only increasing in recent weeks on daft and in general the property prices are remaining static. I reached out to a number of EA's in the last week asking if they were willing to accept under offers for their new build developments and all said prices listed were non - negotiable. I reckon they wont cut their prices (on new builds) until we are officially in a recession.

Its already begun.I saw a property in Cork drop by 25K.
I know a guy in work got his house 30K cheaper than what the seller originally wanted as a result of CV19.

Padre_Pio

GreeBo wrote: »

Why does he regret it?
He is back where he started value wise and has avoided 12 years of renting?

2 bed apartment.

He was living in it and had no value to leverage for to buy a bigger property.
Had to put his life on hold and delay having another child as they didn't have the space and couldn't afford to get out.

It's an exceptional example I know.

Billythekid19

Interesting that there was a drop of 25k. I see a reverse situation where there is a property advertised in douglas for 420k at the moment. The same property was in the property section of the Irish examiner Jul 27, 2019 with an asking price of €395,000 and did not sell at that price. So I'm wondering will the EA drop the price in a few months so it'll register as a 25 k drop and as a result the buyer thinks they have gotten a bargain and seller gets the price they wanted.

SozBbz

Padre_Pio wrote: »

2 bed apartment.

He was living in it and had no value to leverage for to buy a bigger property.
Had to put his life on hold and delay having another child as they didn't have the space and couldn't afford to get out.

It's an exceptional example I know.

Not really, obviously the fact he hoped to flip it in a matter of months is laughable now but lots of people got trapped in apartments that were too small for their long term/family needs.

This is really important to those of us who say that people should maybe go ahead with a purchase at the right time for them rather than trying to game the market....the property has to fit more than just your immediate needs, so that if you do end up holding onto it for longer than you imagined, that it wouldnt impact your life choices in a negative way.

Scenarios like the above don't change this advice.

Its always risky to buy something that only fits your immediate needs.

Donald Trump

"House prices in Ireland could fall 20pc this year and continue to decline in 2021, KBC Bank has warned its investors. "

https://www.independent.ie/business/irish/house-prices-could-fall-by-20pc-kbc-warns-39205578.html

SozBbz

Gamb!t wrote: »

Its already begun.I saw a property in Cork drop by 25K.
I know a guy in work got his house 30K cheaper than what the seller originally wanted as a result of CV19.

Proves nothing. The asking price could have been ambitious in the first place. Its not unusual for initial asking prices to be revised downwards. I saw this first hand last year. I noticed it especially when people were pricing fixer uppers as if they were in turnkey condition and then failed to get offers.

I do think prices will dip a bit, but its too early to infer anything. Very few transactions will happen until September at the earliest.

Some people who are eager to sell may drop their expectations. Lots will decide to hold fire. I think the stock will be very limited for the next while, lots of estate sales and divorces , but if you were just thinking of trading up of down, why would you rush?

Tallback

I wanted to post the link to the actual KBC presentation to analysts including their house price forecasts but the system won't let me. It's available through the main KBC investors relations site

They lay out a Optimistic/Base/Pessimistic scenario for 2020/21/22

For Ireland
2020 2021 2022
Optimistic -6% +5% +4%
Base Case -12% +8% +5%
Pessimistic -20% -5% +3%


So essentially they see a price shock followed by a recovery. Interestingly they seem to think the decline will be quicker and deeper in Ireland but that the return to growth will happen quicker too

They also have unemployment forecasts too.

Donald Trump

Tallback wrote: »

I wanted to post the link to the actual KBC presentation to analysts including their house price forecasts but the system won't let me. It's available through the main KBC investors relations site

They lay out a Optimistic/Base/Pessimistic scenario for 2020/21/22

For Ireland
2020 2021 2022
Optimistic -6% +5% +4%
Base Case -12% +8% +5%
Pessimistic -20% -5% +3%


So essentially they see a price shock followed by a recovery. Interestingly they seem to think the decline will be quicker and deeper in Ireland but that the return to growth will happen quicker too

They also have unemployment forecasts too.

Are those numbers relative to today or YoY? I assume the latter. In which case their base case has 2022 as slightly lower (almost equal) to today (pre covid level or 2019 I presume).

Optimistic has 2.6% increase

SozBbz

Tallback wrote: »

I wanted to post the link to the actual KBC presentation to analysts including their house price forecasts but the system won't let me. It's available through the main KBC investors relations site

They lay out a Optimistic/Base/Pessimistic scenario for 2020/21/22

For Ireland
2020 2021 2022
Optimistic -6% +5% +4%
Base Case -12% +8% +5%
Pessimistic -20% -5% +3%


So essentially they see a price shock followed by a recovery. Interestingly they seem to think the decline will be quicker and deeper in Ireland but that the return to growth will happen quicker too

They also have unemployment forecasts too.

So, if you're buying a home to live in for 10, 20, 30 years theres no real issue with any of the above. The Baseline case has you back at basically the same price within 2 years.

Optimistically, you're up 2.5% in 2 years.

Worst case, you're down 20% on paper, but presumably there will be recovery beyond 2022 in this scenario. You'd have to evaluate that against the costs of not buying and make your decision from there.

Especially if you think you might get a bit of a discount now (of course you'd chance your arm) then its still worthy of consideration.

And if you're say 35+ then it might make a lot of sense, especially if you can knock a few €k off and can find something you can make work wiht the limited stock on offer.

megabomberman

I reckon some EAs will adopt a strategy of placing houses on the market at prices higher than they would have if listing in Q1-2020, pre covid. That way buyers might be lulled into agreeing a '5-10%' discount on the inflated price.

I've seen at least one house recently placed on the market at a mad price and it makes sense as a pricing strategy, at least until or if things turn so sour that the vendor just looks silly.

Umaro

Billythekid19 wrote: »

When do people expect price drops to actually happen? It seems rent prices are only increasing in recent weeks on daft and in general the property prices are remaining static. I reached out to a number of EA's in the last week asking if they were willing to accept under offers for their new build developments and all said prices listed were non - negotiable. I reckon they wont cut their prices (on new builds) until we are officially in a recession.

I think the majority of people here would agree a price drop of around 5% has already happened. There's buyers negotiating a little bit off the asking price as well as some sellers keen to complete the sale during lockdown.

However, it'll be about 6 months before we see the proof that prices are falling, as we're kind of stuck in suspended animation at the moment. The severity of the recession won't be felt for a while as we don't know how many jobs and businesses will come back once we've re-opened.

We'll probably get to the end of 2020 and be saying "That wasn't so bad, looks like prices only fell 5-7%" before we feel the full effect in 2021 which could be a further 10%.

hometruths

Padre_Pio wrote: »

2 bed apartment.

He was living in it and had no value to leverage for to buy a bigger property.
Had to put his life on hold and delay having another child as they didn't have the space and couldn't afford to get out.

It's an exceptional example I know.

Any idea what the value of it today is? i.e if he is in positive equity now, how much would he be up after he cleared mortgage?

awec

I think Padre Pios scenario is consistent with the warnings on here:

1. Don't try speculate on property when buying your own home and buy something that you think you'll sell on for profit in the near future, this is how people get stuck in unsuitable accommodation and negative equity becomes a major factor. If you can't live there for a long time don't buy it.
2. Be extra careful buying apartments, as these tend to be lose appeal more than houses.

GreeBo

Padre_Pio wrote: »

2 bed apartment.

He was living in it and had no value to leverage for to buy a bigger property.
Had to put his life on hold and delay having another child as they didn't have the space and couldn't afford to get out.

It's an exceptional example I know.

Fair enough, I think this is a great example (there are lots!) of why you need to buy a place that is somewhere to live rather than just get on the proepty ladder/investment.

The first house I bought was a balance of what I could afford, what I would live in for significantly longer than the plan, what suited me as an area to live in and most importantly, what I could manage should there be some unexpected finances along the way.

Anything else simply relies too much on the market to bail you out of a basd decision.

GreeBo

SozBbz wrote: »

Not really, obviously the fact he hoped to flip it in a matter of months is laughable now but lots of people got trapped in apartments that were too small for their long term/family needs.

This is really important to those of us who say that people should maybe go ahead with a purchase at the right time for them rather than trying to game the market....the property has to fit more than just your immediate needs, so that if you do end up holding onto it for longer than you imagined, that it wouldnt impact your life choices in a negative way.

Scenarios like the above don't change this advice.

Its always risky to buy something that only fits your immediate needs.

Yep, and in fairness, I have been saying that exactly since day 1.
COVID-19 doesnt change the requirements you need to satisfy when buying a house.

GreeBo

awec wrote: »

I think Padre Pios scenario is consistent with the warnings on here:

1. Don't try speculate on property when buying your own home and buy something that you think you'll sell on for profit in the near future, this is how people get stuck in unsuitable accommodation and negative equity becomes a major factor. If you can't live there for a long time don't buy it.
2. Be extra careful buying apartments, as these tend to be lose appeal more than houses.

Apartments (or rather Irish apartments) serve a very narrow period in most peoples lives.

If you had to choose between a 1 bed in Ticknock or a 3 bed house in Clonsilla, then I would always go for the house.
Sure it might not tick all your boxes, but you can start a family in it. Of all the options, pausing when you start a family is not really something you want to be forced into imo. Biological clocks and all that.

0gac3yjefb5sv7

There is a lot of dislike of apartments on boards. Some have had very bad experiences but I do enjoy apartment living over a house.